Fuel, food costs forming perfect storm in America

As we worry about gasoline prices, the costs of milk, meat and fresh produce silently skyrocket. So like the end of cheap energy, is the era of cheap food also finally over?

As we worry about gasoline prices, the costs of milk, meat and fresh produce silently skyrocket. So like the end of cheap energy, is the era of cheap food also finally over?

Since the farm depression of the early 1980s -- remember the first Farm Aid concert in 1985? -- farmers have gone broke in droves from cheap commodity prices. The public shrugged, happy enough to get inexpensive food. Globalization saw increased acreage planted and farmed around the world with Western methods of efficient production. And that brought into the United States even more plentiful imported food. The result was predictable: the same old food surpluses and low prices. My late parents, who owned the farm I now live on in central California, used to sigh that the planet was approaching 6 billion mouths to feed, so things someday "would have to turn around for farmers."

Now they apparently have. Food prices are climbing at rates approaching 10 percent per year. Why the sudden change?

A number of relatively recent radical changes in the United States and the world, taken together, provide the answer:

High-tech farming is energy intensive, so the huge price increases in fuel and petroleum-based fertilizers and chemicals have been passed on consumers.

The public furor over illegal immigration has, despite all the inaction, still translated into some increased border security. And with more vigilance, fewer illegal aliens are crossing the border to harvest labor-intensive crops such as fruits and vegetables.

The U.S. population increases while suburbanization continues. The sprawl gobbles up prime farmland at the rate of hundreds of thousands of acres per year.

Periodic droughts in the West and competition from growing suburbs have made water for farming scarcer, more expensive and sometimes unavailable.

On the world scene, 2 billion Indians and Chinese are enjoying the greatest material improvement in their nations' histories. Their improved diets mean more food consumed than ever.

The result is that food supplies are also tightening up at home and abroad. America has become a net food importer. We seem to have developed a taste for foreign wines, cheeses and fresh winter fruits, even as we are consuming more of our own corn, wheat, soybeans and dairy products.

Now comes the biofuels movement. For a variety of reasons, ranging from an attempt to become less dependent on foreign oil to a desire for cleaner fuels, millions of acres of farmland are being redirected to corn-based ethanol.

If hundreds of planned ethanol refineries are built, the U.S. very shortly could be producing about 30 billion gallons of corn-based fuel per year, using one of every four acres of corn for fuel. This dilemma of food or fuel appears elsewhere as Europeans and South Americans begin redirecting food acreages to corn-, soy-, or sugar- based biofuels.

Corn prices in America have spiked. And because corn is also a prime ingredient for animal feed and sweeteners, prices likewise are rising for poultry, beef and everything from soft drinks to candy. More corn, about 90 million acres, has been planted than at any time in 50 years. But total farm acreage is either static or shrinking because land for biofuels is usually taken from wheat, soybeans or cotton, ensuring those supplies grow tight, as well.

The genius of our farmers and the mind-boggling innovation of American agribusiness meant that farm production periodically doubled. Indeed, we are producing far more food on far fewer acres. But we are nearing the limits because amazing leaps in production relied on cheap petrochemicals, fuels and fertilizers.

As in the case of oil, we've gone through these sudden farm-price spikes before. My grandfather told me that in 70 years of boom-and-bust farming, he only made money during World Wars I and II, and the late 1960s.

But this latest round of high food prices seems coupled to energy shortages, and so won't go away anytime soon. That raises questions critical to the very security of this nation, which may have to import as many agricultural commodities as it does energy -- and find a way to pay for both.

The American consumer lifestyle took wing because of low-cost fuel and food. Once families could drive and eat cheaply, they had plenty of disposable income for other things.

How angry will they get as they buy less and pay more for the very staples of life?

Victor Davis Hanson is a senior fellow at the Hoover Institution on War, Revolution and Peace at Stanford University.